Many of the biggest misconceptions that people have about the college process revolve around financial aid. Now that we’re in the midst of financial aid season, I wanted to share  four  financial aid myths that are probably the most common.

1. I make too much money to qualify for financial aid.

You shouldn’t automatically assume that you won’t qualify for need-based assistance. How much income you earn is only one part of the equation. What also matters is the price of a particular college. For example, some families that don’t qualify for financial aid at moderately priced state schools may be in line for considerable help at pricey universities.

At Princeton University, for instance, families making between $160,000 and $180,000 qualified recently for an average of $26,450 in financial aid.

You can obtain an early assessment of whether your family might qualify for aid by using a free financial aid calculator. The calculator will produce an estimated Expected Family Contribution, which is what colleges would expect you to pay, at a minimum, for one year of school.

Here is the EFC calculator on the College Board website that I like to use.

Of course, you should ALWAYS use a net price calculator when evaluating your chances for need-based financial aid or merit aid for affluent students at specific  schools. See my previous post on this topic:

Playing Hide and Seek With Net Price Calculators

2. My home equity will kill my chances for aid.

Most colleges won’t care if you own a house and won’t count home equity against you if you do. That’s because the majority of schools rely on the federal aid application, the Free Application for Federal Student Aid (FAFSA), which doesn’t even ask parents if they own a home.

Colleges that use an additional form, the CSS/Financial Aid PROFILE , will inquire about a family’s home equity. With rare exception, however, these colleges will limit the amount of home equity they consider when they evaluate a family’s ability to pay. Colleges will typically impose a cap that rarely exceeds 2.4 times a family’s income, according to Paula Bishop, a smart CPA in Bellevue, Wash. who assists families with financial aid issues.

Here is the list of the 249 colleges and universities that use the PROFILE.

3. I have saved too much in my child’s college fund to qualify for aid.

In reality, less than 4% of American families who apply for financial aid are penalized for their savings. My post tomorrow will delve into this topic.

4. Completing financial aid forms is a waste of time.

Most families should complete financial aid applications, because without filing these documents, they will have no hope of receiving need-based aid nor will they be able to obtain federal college loans.

The FAFSA became available on January 1 for the 2012-2013 school year. The application should not take long if you gather the necessary documents before you sit down at your computer. You can find out what information you’ll need to complete the FAFSA by checking out the FAFSA on the Web Worksheet in advance.

The latest PROFILE is available every fall. While the FAFSA is free, the PROFILE costs $25 for the initial application and college report, and all additional reports are $16 each. Some low-income families will be eligible for fee waivers.

Join Me at My College Workshop on Saturday!

I will be holding a college workshop at the University of California, San Diego this Saturday (Feb. 4). At the Finding the Right College Workshop, you will learn specific strategies to increase your child’s admission chances, ways to evaluate colleges and universities, essential ACT and SAT information and what you need to know about  college rankings.

You can learn more here and sign up for the workshop here.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and a workbook, Shrinking the Cost of College. Follow her on Twitter and Facebook.

It’s FAFSA season so I’m going to devote at least a couple of college blog posts this week to financial aid forms.

The post today was actually written by Michael Szarek, an independent college counselor with Counseling for the Rest of Us in New Jersey.

If you have any questions about the FAFSA or CSS/Financial Aid PROFILE, just share them with us in the comment box below. I’ll try to answer them this week.

22 Facts About The FAFSA

1) The FAFSA is THE form required at all colleges that accept and award federal aid.  (Yes, there are a few that do not participate in the federal financial aid system, but these schools are rare. )

2) It’s the form that provides your college financial aid officers with the information they need to go ahead and create your financial aid package.

3) FAFSA stands for FREE Application for Federal Student Aid.

4) Hence, it’s FREE.

5) It’s available online at www.fafsa.ed.gov.  NOT dot com, NOT dot org, NOT dot anything else.

6) You can still get a paper version, if you really, really, really want to.  But you don’t.

7) It utilizes a July-to-June calendar.  In other words, we are in the middle of the 2011-2012 year and “New Year’s Day” is July 1, when we move to the 2012-2013 year.

The 2012-2013 form is available for processing on January 1, 2012.

9) The FAFSA helps determine the awarding of over $150 billion in federal aid, as well as state aid.

10) The majority of colleges also use the FAFSA to determine who qualifies for their own institutional need-based aid.

11) If you have your 1040 income tax return available, the form can be fairly straightforward.

12) Do not pay someone $1500 to fill the form out for you to “maximize your aid potential”.  Generally, the only one receiving more aid in that situation is the preparer.

13) The FAFSA is based on your current household and your current assets. What you’ve got in the bank and investment accounts on the day you complete the FAFSA.

14) But the FAFSA wants to know about last year’s (2011) income for your household.

15) If your parents are divorced or separated, it’s based on the parent you spent the most time with in the previous year.

16) And your step-parent, if there is one in that household.

17) Don’t send notes to the federal processor.  They’ll just shred ‘em.  Your concerns and questions should be directed to the financial aid office of the school you attend or are planning to attend.

18) Your parents saying that they won’t pay for College does NOT grant you independent status. To be considered independent, you have to be 24 years old, married, a military veteran or some other factors you can learn about here.

19) Here’s a link to a useful webinar about the FAFSA. (Useful, but 60 minutes in length)

20) Here’s a link to my favorite FAFSA video. (Enjoyable, only 5 minutes in length)

21) Here’s a link to my Facebook page – feel free to post any $$/FA questions you have.

22) If you have FAFSA questions, you can the federal government’s hotline at (800) 433-3243.

Read More from The College Solution:

Avoid 10 Common FAFSA Mistakes

4 Ways to Get FAFSA Help

My Upcoming College Workshop:

I wanted to let you know that I will be holding my next two college workshops at the University of California, San Diego on Jan. 28 and Feb. 4. At the workshops — you can sign up for one or both – I aim to share with you ways to help you make smart decisions about picking colleges and making them more affordable. You can learn more here and sign up for the workshops here. Lynn O’Shaughnessy

I have been writing college blog posts recently about teenagers who have arguably been applying to the wrong colleges. (Scroll to the bottom to see my three previous posts.)

All my posts have involved families who required financial aid, but today I’m sharing the plight of a father who is too wealthy to receive need-based help.

Anxious Dad’s Email

Here is the email that I received from the father, who is a financial adviser:

I have a high school senior who applied to Johns Hopkins University and was accepted.  She is also going to play field hockey there.  Being a typical “rose colored” glasses person, I figured we’d get some financial assistance.  I filled out the CSS/Financial Aid PROFILE.  The package came back and there was ZERO assistance on there.

I thought the field hockey thing would provide her some backing and consideration but I was wrong.  Additionally I’m usually very good at getting a straight answer from people and for some reason I didn’t from our liaison at JHU.  I can’t believe JHU considers us rich!  Does anyone back there know how expensive it is to live and raise a family in Southern California?

Needless to say, I’m a little discouraged and concerned since it’s such an expensive school.  I know JHU has resources.  I’m very surprised we did not get any assistance. I was wondering what you recommend.

 My Response

I am sorry that your daughter didn’t receive any money from Johns Hopkins, but this is a university that almost never gives money to rich students. If you have a high Expected Family Contribution, which was generated by the PROFILE, your daughter would have had a slim to zero chance of getting any money.

Finding the Answer in the Common Data Set

Okay, so how did I know that Johns Hopkins rarely gives scholarships to well-off students? I looked at John Hopkins’ Common Data Set, which is a valuable document that many schools complete yearly that contains a great deal of information about such things as the institution’s need-based aid, merit awards, acceptance figures, academic profile of freshmen and much more.

Section H of any school’s Common Data Set contains the information on the number of students who apply for financial aid, the number who receive aid and what the typical financial aid package is. In the same section, the Common Data Set also shares whether the school gives merit awards to wealthy students.

Only a handful of wealthy students received money from Johns Hopkins, which reserves its financial awards to  students with demonstrated financial need. Here is the pertinent section of Johns Hopkins’ Common Data Set:

In the 2010-11 school year (latest available),  just 10 freshmen received merit scholarships, which were worth an average of $26,318. To give you a frame of reference, there were 1,241 students in the university’s freshmen class and 551 freshmen received need-based grants. The average need-based grant was $30,791. Doing the math, you can see that the majority of students — 680 – paid full price. Like a lot of highly prestigious East Coast schools, Johns Hopkins is crawling with rich kids, whose parents are footing the entire bill.

Almost all schools in this country award merit scholarships to rich students, but a few highly prestigious ones don’t give awards to these teenagers or they dispense just a few token scholarships.  Johns Hopkins belongs in this category. Schools like all the Ivies and the very top liberal arts colleges don’t have to hand out merit money to wealthy teenagers because they institutions enjoy such high perches in US News & World Report’s college rankings that rich students flock to them without any carrots.

What About the Other Schools?

In responding to the dad’s email I suggested that there could be other schools on his daughter’s list that do give wealthy students merit money. Unfortunately, the two additional schools that he mentioned — MIT and Tufts University — are in the same category at Johns Hopkins.

Another way that you can research a school’s financial aid practices is to look at the institution’s profile on the College Board’s website. Click on the school’s  Cost and Financial Aid link. Here is the link to MIT. You’ll find the pertinent statistic for the dad on the second-to-last line that says average non-need-based aid. In MIT’s case it says not reported. Whenever you see not reported that simply means no merit awards for rich kids.

When I checked Tufts University’s financial aid stats on the College Board, I saw that the average non-need based aid was $500. That’s essentially nothing. Unfortunately, I couldn’t find Tufts’ Common Data Set, which is irritating, but some schools don’t release it.

Bottom Line:

It’s always important to research the financial aid practices of schools before applying. Don’t make any assumptions.

Here are more posts on applying to the wrong schools when money is an issue:

Applying to the Wrong Universities

Another Dreadful College List

Catholic Universities and Yet Another Botched College List

ynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller,  and a financial aid workbook, Shrinking the Cost of College: Great Ways to Cut the Price of a Bachelor’s Degree.

There are a lot of expensive colleges and universities in this country, but as I’ve mentioned many times before on my college blog, the sticker price is meaningless.

The only figure that matters is the college’s net price. This is the price you get after any grants (free money) that you receive from a school are subtracted from the sticker price.

The vast majority of schools in this country discount their price. And you certainly don’t have to be an “A” student to qualify! At private colleges and universities, for instance, about 88% of students have received some type of grant.

You can start doing your own research on colleges and their net prices by visiting the College Affordability and Transparency Center, which the U.S. Department of Education launched last year.

On the site you can research the financial aid practices of individual schools by checking out average net prices in different income ranges, as well other valuable information such as a school’s graduation rates, freshmen retention rates and college major offerings. To get start just hit the button on the site that looks like this:

The center has also compiled lists of the five percent of schools in different categories that charge the highest published prices and the highest net prices. The government also shares the lowest-priced schools, but those aren’t necessarily bargains. Some are low-functioning, drop-out factories.

I am sharing with you the private four-year institutions that have the highest net price. (This is certainly not a list that I’d like to be on!!)

Who’s On the List?

As you can see, there are a lot of art schools and music conservatories on the list, as well as many schools from the East Coast, as well as West Coast. I also counted five Catholic universities. The schools on this list won’t necessarily be the most expensive for your child (if you’re lucky), but you need to run the net price calculators on these and any other schools before they land on your college list.

Read More on The College Solution:

Playing Hide and Seek With Net Price Calculators

I want to give a big thanks to all of my regular visitors — and the new folks too — who helped to make 2011 the best year ever for The College Solution! I know 2011 was my best year because I use Google Analytics to keep track of how many people visit my college blog.

Now that we’re in a new year, I used the analytic tool today to see what my most popular college blog posts were for 2011. If you missed them the first time, I thought you might enjoy reading them.

1. Don’t Believe the Sticker Price: The Most Expensive Colleges in the Country

I wrote this post in July after the U.S. Department of Education released its list of the most expensive state and private colleges and universities in the country. Seven of the 10 priciest institutions are art schools and music conservatories. Unless you’re wealthy, I’d stay away from these schools.

2. Popular College Majors With the Highest and Lowest Unemployment

I took a look at the most popular college majors and discovered which ones have the best and worst unemployment rates. Architecture majors seems to face the lousiest prospects while medical technology technicians enjoy the best.

3. Do You Know the Difference Between a College and a University?

In this May post, I explain the difference between universities and colleges. I firmly believe that if more students understood the differences, more undergrads would be enrolling at colleges.

4. Best and Worst Paying College Degrees

I personally don’t believe you should choose college majors just because of potential pay and frankly most students can’t qualify for the best-paying jobs because most of them require math skills.

4.  Grinnell College: A College Admission Success Story

This was a story about a kid from St. Louis who won the educational lottery when got into Grinnell College, which is among a few dozen schools in the country that offer the best financial aid policies.

5. 10 Great Ways to Shrink the Cost of College

The best way to cut college costs is to be an educated consumer. You an start by checking out these money-saving tips.

6. 30 Liberal Arts Colleges In or Near Cities

I wrote this post because so many teenagers want to attend college in a city. Many liberal arts colleges, including that pair that my kids attend(ed) are not near urban areas, which is what turns off some teenagers who believe (rightly or wrongly) that they have to live in cities during college. I wrote this post for these kids. You should also read the next day’s post where I include the liberal arts schools that I had overlooked : More Liberal Arts Colleges In Or Near Cities

7. Anatomy of a Stingy College and a Generous One

This was one of my favorite blog posts of the year. I compare two Pennsylvania schools — Muhlenberg College and Drexel University – to explain why it’s important examine the financial aid policies of individual schools. FYI, Drexel is the stingy school.

8. Getting Into College With Learning Disabilities

David Montesano, a college consultant in Bellevue, WA, wrote this great guest post for high schools students with learning disabilities. You’ll find a lot of helpful advice on this topic.

9. What is the Best Student Loan?

The best college loan for students is the Stafford Loan. I provide a link to a bunch of my student loan posts.

10. Financial Aid and Divorce

I write about a teenager with divorced parents who blew it when developing her list of schools. The blog posts shares how different schools treat families of divorce.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller,  and a financial aid workbook, Shrinking the Cost of College: Great Ways to Cut the Price of a Bachelor’s Degree, which is only available on her website.

There are many websites that you can research the financial aid practices of individual schools. Today I’m going to focus on an especially helpful site — the federal College Navigator.

The College Navigator is not flashy, but it contains incredible tools that tap into the US Department of Education’s vast college database.

The College Navigator provides information on individual schools in the following 12 categories:

A School’s Net Price

Today I’m focusing on just one category — the net price. When considering whether a school will be affordable, I like to look at its net price statistics. This is where you can find out what families of various incomes typically pay for one year of college at a particular school.

The net price feature takes into account the typical grants and other assistance that students at a particular school obtain. The net price is far more important a figure than the sticker price, which is usually meaningless.

To illustrate how the net price feature works on College Navigator, I’m using Penn State, which has been in the news lately for all the wrong reasons, and Gettysburg College, a private liberal arts college that’s also in Pennsylvania. The latest net prices are from 209-2010. During that year, the sticker prices for Gettysburg College was $49,500 and at Penn State it was $29,520.

Penn State Average Net Price

Gettysburg College Average Net Price:

Looking at the net price of schools via the College Navigator is a great way to dispel misconceptions about the costs of individual institutions.  For accepted low-income applicants, for instance, Gettysburg is cheaper. Gettysburg is one of the rare schools that can meet 100% of each of its student’s demonstrated financial need though it does include loans in its packages. When I checked over at the College Board, the average loan was  $5,183, which would be covered by a Stafford Loan. Public institutions like Penn State just don’t have the financial resources to be as generous to low-income students.

Here is the list of all the schools that say they meet 100% of students’ demonstrated financial need:

Which Colleges Claim to Meet Students’ Full Financial Need?

On the other hand, Penn State will be a slightly less expensive alternative for wealthy students. Of course, price is hardly the only factor when choosing schools, but it’s good to obtain an idea in advance of looming costs.

Net Price Calculator

This fall every college and university had to install a net price calculator on their web sites that is designed to provide individual families with a good idea of how much institutions on their lists will cost them. They should be far more accurate than the College Navigator’s averages.  Here are some posts that I’ve written about net price calculators:

Net Price Calculators: Getting Wildly Different Answers

Playing Hide and Seek With Net Price Calculators

New College Cost Calculators What You Need to Know

You’ll find plenty of more great statistics on the College Navigator and I’d urge you to explore the site.

Read more on The College Solution:

Using the College Board to Research Schools

6 Ways to Pick College Classes

Combining Liberal Arts With a Business College Degree

Lynn O’Shaughnessy is the author of a workBook, Shrinking the Cost of College: 152 Ways to Cut the Cost of a Bachelor’s Degree. She also writes a college blog for CBSMoneyWatch. Follow her on Twitter.